With material costs and and labor shortages being what they are, its a good time to bump up the move out and repair charges list portion of your leases.

I have a simple policy on this that keeps me up with the times: "Cost plus" pricing. Take the actual cost, add 20% or $50, whichever is greater, for profit margin and hassle factor.

So if I have a total of $1,000 for all of the charges written into the lease, then I can only charge $1,000. If materials went up (lumber price spikes, anyone?) then too bad, so sad.

With cost plus pricing, if labor + material goes up to $1,000 then I charge $1,200. If it goes up to $2,000, then I charge $2,400. Etc.

Maybe not as good of a profit center as some of you, but very work involved for updating, and it also shields me from spikes in labor and material costs. I may be leaving money on the table. With better quality of tenants, though, I haven't had as much to worry about. My worst turnover of 2020 was less than $500.

Sid, I also have a disclaimer in regards to fluctuating costs on the top of my charges sheet.

I include all this at lease signing and in my discounted payment plan agreement when I send it out to the tenant.